This study assesses the natural gasmarket in Peru. In the process of evaluating the downstreammarket, the study identifies opportunities for meeting theGovernment s aspirational goals with respect to energy andnatural gas development, including the efficient use ofnatural gas in the power and other sectors, strengtheningand coordinating national energy planning for the gassector, infrastructure development and prospects fordecentralization of the natural gas market in Peru, and thepotential of natural gas pricing reforms for the promotionof hydroelectricity and other renewable energy sources. Thisreport is divided into five chapters. Chapter I describesthe context in which this study was prepared. Chapter IIpresents a history of the natural gas sector and theGovernment of Peru s policy objectives to increase the useof natural gas in the domestic economy. Chapter III presentspotential new markets for natural gas within the presentcontext of the natural gas industry and the Peruvianeconomy. Chapter IV describes findings, issues, and optionsfor improving Peru s downstream natural gas sector,including a discussion of the consistency between theGovernment s objectives and its policies for the sector.Chapter V sets out the conclusions of the study.